Central Information Commission
Ashish Mahajan (Indusind Bank) vs Reserve Bank Of India on 13 May, 2022
Author: Neeraj Kumar Gupta
Bench: Neeraj Kumar Gupta
के ीय सूचना आयोग
Central Information Commission
बाबा गंगनाथ माग ,मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
ि तीय अपील सं या/Second Appeal No. CIC/RBIND/A/2019/141892
Mr. Ashish Mahajan ... अपीलकता /Appellant
(IndusInd Bank Limited)
VERSUS
बनाम
CPIO ...!ितवादी/Respondent
Reserve Bank of India
Department of Banking Supervision,
Central Office, 2nd Floor, Centre-1,
Cuffe Parade, Colaba, Mumbai-400005
Relevant dates emerging from the appeal:-
RTI : 26-10-2018 FA : 01-03-2019 SA : 30-08-2019
CPIO : Not on Record FAO : 10-07-2019 Hearing : 22-04-2022
ORDER
1. The original RTI applicant Shri L.N. Gulati filed an application under the Right to Information Act, 2005 (RTI Act) before the Central Public Information Officer (CPIO), Reserve Bank of India, Mumbai. The appellant seeking information on fifteen points including inter-alia is as under:-
Page 1 of 112. No reply of CPIO is placed on record. Further, the CPIO had issued a notice under Section 11(1) read with Section 11(2) under RTI Act, 2005 to the appellant i.e. Induslnd Bank Limited, concerning query at Point No. 2 of the RTI application, wherein Shri Gulati had requested the CPIO to inform him "the details of penalties imposed on Induslnd Bank Limited for last three years and supply copies of RBI orders'. After considering the response from Induslnd Bank Limited, the CPIO decided to disclose the information after severing the information under Section 10(1) which was considered exempt from disclosure under Section 8 of the RTI Act, 2005. Induslnd Bank Limited was informed of the said decision vide letter dated February 04, 2019 issued under Section 11(3) of the RTI Act, 2005. Being dissatisfied with the same, the appellant has file first appeal dated 01-03-2019 and requested that the information should not be disclosed to the original RTI applicant. The FAO vide letter dated 10-07-2019 upheld CPIOs reply and dismissed the appeal. He has filed a second appeal before the Commission on the ground that the order of the FAA should be set- aside.
Hearing:
3. The appellant was personally present in the hearing and was represented through counsel Shri V.K. Gupta. The respondent, Shri Abhay Kumar, General Manager & CPIO along with Ms. Rose Saprocho, Assistant Legal Advisor attended the hearing through video-conferencing. The original RTI applicant Shri L N Gulati was not present despite notice.
4. The written submissions of the parties are taken on record.
5. The counsel for the Indusind Bank Ltd. submitted that the CPIO has passed the non-speaking order as the CPIO had not given any reason to arrive at his decision to disclose the information, no finding is given on various issues raised by the appellant. He stated that the FAA should have considered and applied the provisions of the RTI Act more particularly provisions granting exemption from disclosure and provisions prohibiting disclosure of certain information, while deciding the appeal of the appellant. Simply because the information which the RBI generates or is available in possession with RBI, it cannot be disclosed or given to the public without any further inquiry and examination/scrutiny under provisions of the Act. He stated that the FAA having dismissed the appeal of the appellant by applying the judgment of the Hon'ble Supreme Court of India in Reserve Bank of India & Ors. Vs. Jayantilal Mistry & Ors had violated the principles of natural justice in as much as the appellate authority did not grant any opportunity to the appellant to submit its Page 2 of 11 response to the applicability of said judgment. The information sought by the applicant is exempted from disclosure under Section 8(1)(d), 8(1)(j) of the RTI Act.
6. The respondent, CPIO, Reserve Bank of India submitted that vide letter dated 22.01.2019, they have issued a notice under Section 11(1) of the RTI Act, 2005 to Indusind Bank Ltd. After considering the response/written submission from Indusind Bank, the CPIO, vide letter dated 04.02.2019 has issued a notice under Section 11(3) of the RTI Act, 2005 informing the appellant the decision to disclose the information after severing the information exempt from disclosure under Section 10(1) of the RTI Act, 2005. The respondent further submitted that aggrieved by the letter/notice dated 04.02.2019 issued by the Reserve Bank/CPIO in exercise of the powers conferred by Section 11(3), the appellant preferred an appeal under section 19 of the RTI Act before the First Appellate Authority (FAA). In the appeal, the appellant stated that Indusind Bank is not a public authority as per RTI Act, 2005. The appellant has also contended that the order dated 19.07.2016 passed by RBI imposing penalty on them is of confidential nature and disclosure of the same may harm their competitive position. The FAA had also upheld the reply given by the CPIO. The following observation of the Hon'ble Supreme Court in Reserve Bank of India & Ors. v. Jayantilal N. Mistry & Ors., (2016) 3 SCC 525 is pertinent in this regard "RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of 'trust' between them. RBI has a statutory duty to uphold the interest of the public at large".
Decision:
7. The Commission, after hearing the submissions of all the parties and after perusal of records, observes that the RTI applicant Shri L N Gulati had sought information regarding "Please provide the details of main promoters of Induslnd Bank Ltd. i.e. their name, position, shareholding, change in shareholding since date of licensing, details of their shareholding; Please inform the details of penalties imposed on Induslnd Bank Ltd. for last three years and supply copies of RBI orders; Please provide details violation of Prevention of Money Laundry Act by Induslnd Bank as observed by RBI during its inspection / reported to RBI by the bank. The action taken against the bank by RBI in each instance of PML Act violation, etc." The CPIO, Reserve Bank of India had issued notice under Section 11(1) and 11(3) to the bank only in respect to point no. 2 of the RTI application mentioned above intending to Page 3 of 11 disclose the information. Aggrieved by the decision of the CPIO, the said bank had filed first appeal with the First Appellate Authority. But the FAA had also dismissed the first appeal of the bank summarily. Being aggrieved with the order of the FAA, bank had filed second appeal before this Commission.
8. The Commission further observes that some queries of the RTI applicant are in the nature of seeking explanation/opinion/advice from the CPIO viz. 'Please inform has Induslnd Bank have a Succession planning/succession Plan for the post of MD & CEO. Has the same been submitted/reported to RBI and when? lf yes provide the details of Succession Plan; Please inform instances of promoter being appointed as the non-executive Chairman of private banks, etc.' and he has expected that the CPIO firstly should analyze the documents and then provide information to the RTI applicant. But the CPIO is not supposed to create information; or to interpret information; or to furnish clarification to the applicant under the ambit of the RTI Act. As per Section 2(f) of the RTI Act, the reasons/opinions/advices can only be provided to the applicants if it is available on record of the public authority. The CPIO cannot create information in the manner as sought by the applicant. The CPIO is only a communicator of information based on the records held in the office and hence, he cannot expected to do research work to deduce anything from the material therein and then supply it to him.
9. The Commission takes note of the submissions made by the Bank that large amount of data relating to its clients including their identity, penalties imposed on them, business plans, decisions and financial transactions as well as institutional business plans etc. of bank is shared with the regulator, without any redaction or withholding the information, in good faith that these will be objectively analysed in discharge of their statutory obligations to make fair judgment on their functioning without affecting their competitive position. To this extent, there is an element of trust and confidence in sharing the data, both financial and operational, between the RBI and the bank. The information and data of the clients in the hands of Bank also has the element of trust and confidence that such data will not be disclosed or shared against their right to privacy/commercial interest.
10. The Commission further takes note of the FAA's order referring to the Jayantilal Mistry's case upholding the decision of CPIO. The ratio of the said judgment is that annual inspection report/audit reports of bank generated in the hands of Reserve Bank of India as regulator does not enjoy protection under Section 8(1)(e) of the RTI Act and the relationship between RBI and financial institutions to that extent cannot be termed as 'fiduciary'. For various issues involving right to privacy or protection of commercial interests Hon'ble Page 4 of 11 Supreme Court and High Courts have passed orders amply clarifying disclosure of such matters under the provisions of RTI Act and exemption under Section 8(1) of the Act.
11. Keeping in view the broader nature of business carried out between a customer and the bank, the Commission takes note of the observations passed by the Supreme Court in Central Board Of Sec. Education & Anr. vs Aditya Bandopadhyay & Ors [2011 (8) SCC 497] vide order dated 09.08.2011 examined and explained the expression 'fiduciary relationship', and have illustrated a few relationships where parties were involved in an act of fiduciary capacity including 'customers' in the following words:
"20. The term `fiduciary' and `fiduciary relationship' refer to different capacities and relationship, involving a common duty or obligation. 20.1) Black's Law Dictionary (7th Edition, Page 640) defines `fiduciary relationship' thus:
A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships - such as trustee-beneficiary, guardian-ward, agent- principal, and attorney-client - require the highest duty of care. Fiduciary relationships usually arise in one of four situations : (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer."
"39. The term "fiduciary" refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term "fiduciary relationship" is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard Page 5 of 11 to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party."
While taking into consideration the fact that the customers give their financial information to the banks in confidence and with complete faith that may not be divulged as a result of disclosure by others, the following observations passed by the Supreme in Court Bihar Public Service Commission v. Saiyed Hussain Abbas Rizwi and Anr. [ (2012) 13 SCC 61] may be relied upon:
"The satisfaction has to be arrived at by the authorities objectively and the "consequences of such disclosure have to be weighed with regard to the circumstances of a given case. The decision has to be based on objective satisfaction recorded for ensuring that larger public interest outweighs unwarranted invasion of privacy or other factors stated in the provision. Certain matters, particularly in relation to appointment, are required to be dealt with great confidentiality. The information may come to knowledge of the authority as a result of disclosure by others who give that information in confidence and with complete faith, integrity and fidelity. Secrecy of such information shall be maintained, thus, bringing it within the ambit of fiduciary capacity. Similarly, there may be cases where the disclosure has no relationship to any public activity or interest or it may even cause unwarranted invasion of privacy of the individual. All these protections have to be given their due implementation as they spring from statutory exemptions. It is not a decision simpliciter between private interest and public interest. It is a matter where a constitutional protection is available to a person with regard to the right to privacy. Thus, the public interest has to be construed while keeping in mind the balance factor between right to privacy and right to information with the purpose sought to be achieved and the purpose that would be served in the larger public interest, particularly when both these rights emerge from the constitutional values under the Constitution of India."
Further, in Naresh Trehan vs Rakesh Kumar Gupta [W.P.(C) 85/2010 & CM Nos.156/2010 & 5560/2011], the Delhi High Court made the following observations:
"...It is, thus, essential that information relating to business affairs, which is considered to be confidential by an assessee must remain so, unless it is necessary in larger public interest to disclose the same. If the nature of information is such that disclosure of which may have the Page 6 of 11 propensity of harming one's competitive interests, it would not be necessary to specifically show as to how disclosure of such information would, in fact, harm the competitive interest of a third party. In order to test the applicability of Section 8(1)(d) of the Act it is necessary to first and foremost determine the nature of information and if the nature of information is confidential information relating to the affairs of a private entity that is not obliged to be placed in public domain, then it is necessary to consider whether its disclosure can possibly have an adverse effect on third parties."
The Supreme Court while deciding upon issues relating to personal information of an individual in terms of his income tax returns passed the following observations in Girish Ramchandra Deshpande v. Central Information Commr. [(2013) 1 SCC 212] :
"12. The petitioner herein sought for copies of all memos, show-cause notices and censure/punishment awarded to the third respondent from his employer and also details viz. movable and immovable properties and also the details of his investments, lending and borrowing from banks and other financial institutions. Further, he has also sought for the details of gifts stated to have been accepted by the third respondent, his family members and friends and relatives at the marriage of his son. The information mostly sought for finds a place in the income tax returns of the third respondent. The question that has come up for consideration is:
whether the abovementioned information sought for qualifies to be "personal information" as defined in clause (j) of Section 8(1) of the RTI Act.
13. We are in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show cause notices and orders of censure/punishment etc. are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression "personal information", the disclosure of which has no relationship to any public activity or public interest. On the other hand, the disclosure of which would cause unwarranted invasion of privacy of that individual. Of course, in a given case, if the Central Public Information Officer or the State Public Information Officer of the Appellate Authority is satisfied that the larger public interest Page 7 of 11 justifies the disclosure of such information, appropriate orders could be passed but the petitioner cannot claim those details as a matter of right.
14. The details disclosed by a person in his income tax returns are "personal information" which stand exempted from disclosure under clause (j) of Section 8(1) of the RTI Act, unless involves a larger public interest and the Central Public Information Officer or the State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information."
The aforementioned observations make it clear that the data has been shared by the individuals with the Income Tax Department which is seeking such information as an statutory authority but while analyzing and assessing their income keeps this data secure in the fiduciary capacity and hence it is protected from disclosure. It is applicable not only for individuals but for other legal entities recognizable under Income Tax Act. Further, it has been observed that the information in the hands of public authority even in the discharge of statutory obligations is protected under fiduciary relationship.
12. There are apparently two set of such information which have been shared by the bank with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institution which may have bearing on their competitive position and also enjoys the exemption from disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. The Commission is of the view that the exemption of disclosure of certain information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligations. This aspect is not the ratio of Hon'ble Supreme Court in Jayantilal Mistry's judgment and decision of the regulator to consider redacting such data/information while disclosing the reports is to be aligned with this and other judicial pronouncements of Supreme Court and High Courts covering such aspects.
13. The Commission has also taken a detailed view in file nos. CIC/RBIND/A/2021/152460 & Ors. dated 05.05.2022 wherein issues of redaction, ratio of Jayantilal Mistry case and other related issues are discussed in detail. Perusal of the relevant paragraphs in Jayantilal Mistry judgment make Page 8 of 11 it clear that the fundamental rights enshrined upon the citizens in form of right to information are not absolute and that the right to information may not draw precedence over right to privacy. Therefore, the Courts need to strike a balance between the rights as well as protections guaranteed to a citizen under Article 19 of the Constitution. Hon'ble Supreme Court of India has held that the disclosure of information relating to banks and financial institutions may be allowed taking into account the circumstances and nature of information sought for and not in a blanket manner. The Commission advised the CPIO to consider taking the relevant references from the said order while deciding the cases.
14. The Commission further observes that the CPIO while issuing notice under Section 11 of the RTI Act has given the opportunity to the bank to seek their objections, if any, against disclosure of information w.r.t point no. 2 of the RTI application but has not found it necessary to give them an opportunity of hearing. The CPIO has not passed any reasoned order covering his deliberation on their objections, his understanding of law or jurisprudence in rejecting specific objections in favor of disclosure or redaction etc. Orders passed by the CPIO is cryptic and without any reference to objections raised by the Bank. Similarly, the FAA instead of passing a speaking order have given a cryptic and vague reply to the appellant bank. The CPIO and the FAA have visibly not applied their mind before issuing the order of intent of disclosing the information. The conduct of the CPIO and FAA is not in line with the provisions of the RTI Act and principles of natural justice. Further, no opportunity of hearing was given to the appellant bank in order to enable them to make their submissions nor speaking order have been passed by FAA for not giving such opportunity of hearing or elaborating reasons for accepting /not accepting their objections. The Commission is of the view that objections should be specifically dealt and rejected/accepted with reasons. Further, the order of CPIO and FAA have been passed without any opportunity of hearing to the appellant but the orders so passed do not reflect deliberation and understanding of points raised by the appellant not requiring any personal hearing. There is nothing on record which shows that the CPIO has given point- wise reply to the original RTI applicant on his RTI application beside point no.
2.
15. The Commission is of the view that opportunity of hearing should necessarily be provided and orders passed by the CPIO and the FAA should be reasoned, speaking and clear. In view of the above, the Commission directs the CPIO, Reserve Bank of India to re-examine the RTI application of the original RTI applicant in the light of the observations of the Commission afresh. The Commission also expects that the CPIO will take view on various objections Page 9 of 11 filed by the Bank and submissions made by applicant to reach the decision in favour or against redaction of various parts of the information sought. He has to factor the observation of Hon'ble Supreme Court in Jayantilal Mistry case and other relevant judgments, some of which have been referred in this order as well. Hence, with these observations the orders passed by the CPIO and FAA in these matters are set aside and the case is being remanded to the CPIO for adjudication afresh. The above directions of the Commission should be complied within a period of 30 days from the date of receipt of this order. In case, the appellant/applicant is aggrieved with the order of the CPIO, they are at the liberty to file first appeal before the First Appellate Authority and afterwards second appeal before the Commission.
16. With the above observations, the appeal is disposed of.
17. Copy of the decision be provided free of cost to the parties.
नीरज कु मार गु ा)
Neeraj Kumar Gupta (नीरज ा
सूचना आयु )
Information Commissioner (सू
दनांक / Date : 12.05.2022
Authenticated true copy
(अिभ मािणत स यािपत ित)
S. C. Sharma (एस. सी. शमा ),
Dy. Registrar (उप-पंजीयक),
(011-26105682)
Page 10 of 11
Addresses of the parties:
1. CPIO
Reserve Bank of India
Department of Banking Supervision,
Central Office, 2nd Floor, Centre-1,
Cuffe Parade, Colaba, Mumbai-400005
2. Mr. Ashish Mahajan
Dy. Vice President
C/o. Indusind Bank Limited
3. Mr. L. N. Gulati (Original Appellant)
Page 11 of 11